Great News: Unemployment in the UK is rising, and salary growth is declining 

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This post was originally published on Trademakers

That means savers will get a lower return on their money because the BOE can lower interest rates. How some perceive this as “good news” is beyond me, but this is how many commentators present the situation.

As far as I see it, we have a broken economic system caused by decades of financial mismanagement by short-term, brain-dead political entities, and there is no workable solution until we put a halt to governments spending taxpayer money like teenage lottery winners!

 

The political elite have proven year after year that they lack the competence to manage our economy, yet we are powerless to do anything about it. Or at least feel too scared and helpless to do anything about it.

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We are suffering from the “almost 30-years ago” problem.

 

Almost 30 years ago, Bill Clinton was elected to the White House and started lobbying for the Chinese to join the WTO, which resulted in the collapse of Western world manufacturing and jobs: real productivity and growth.

Almost 30 years ago, the EU significantly increased the number of poor European countries in the group and issued the Euro, encouraging poor people to spend more than they earned.

 

Almost 30 years ago, central banks decided to sell their nations’ Gold, down at 300 dollars, because government paper was a much safer asset. Now, they are buying the same Gold, at more than 2000 dollars, representing massive losses to the impoverished masses.

 

Almost 30 years ago, we saw the internet take off, giving us all access to untold amounts of knowledge and information. Yet we are too busy using it to share videos of young boys wearing make-up than to question what our politicians do with our money.

 

Yes, folks, it’s been almost 30 years since common sense was employed by our politicians, bankers, and the public at large. With all the great innovative leaps forward we have seen in the past 30 years, very few people are better off—unless, of course, you are employed as a politician or public servant.

 

I can appreciate that our views are based on our experiences – or at least before our views were influenced by the internet—but it annoys me no end that our younger people are starting to believe that the current economic situation is normal.

Almost 30 years ago, interest rates were 8-10%, and we were very grateful because before that, they had been much higher, and we were happier and much more financially secure than we are today.

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Please understand my nostalgic reminiscing. Our economies had problems almost 30 years ago, and the less productive members of society went without. But there were many more real-world opportunities for the innovative and hardworking, and these people got real rewards for their efforts without needing to rely on government friends for their profits.

 

The speculative world was much healthier, and people acted much more responsibly. Sure, money was made and lost, and not everything was above board or politically correct, but there was growth, there was opportunity, and more importantly, our politicians didn’t run up massive debts and pass them onto the taxpayer because common-sense fiscal policies were a major consideration when the public went to vote, and this kept our politicians on their toes.

 

It was certainly the case that almost thirty years ago, increased unemployment and stagnant wage rises were not considered “good news” because our countries didn’t have massive debts, and our people strove to be “real-world” productive and profitable.

Taming inflation has always been an aim, but creating an environment for economic growth was a bigger priority than it is today. And that is the major difference. Our political and fiscal priorities have completely changed, and not for the better.

 

Many of you will say, “We have to look forward, not backwards,” and there is some merit in that.

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However, let me remind you that many of the investment decisions people make today, especially in capital markets, are based on what happened historically. We all refer to historical price actions on our charts and compare historical and current data. So, looking back is something we all do to make life and investment decisions.

 

This year, I celebrate 50 years in this crazy world of speculative investing, so sadly, I have more experience than most. I believe most people over the age of 50 will understand the truth in what I have said. Moreover, they will understand that increased unemployment and lower wage increases are not good news, no matter how much our younger, almost 30-year-old, commentators want to suggest it is.

The post Great News: Unemployment in the UK is rising, and salary growth is declining  first appeared on JP Fund Services.

The post Great News: Unemployment in the UK is rising, and salary growth is declining  appeared first on JP Fund Services.

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